Yat Siu, co-founder of Hong Kong gaming software company Animoca, spoke at the Ethereum Community Conference (EthCC) on Wednesday (July 19), mentioning that Hong Kong's rapid adoption of cryptocurrency and Web3 is a sign of big moves in China. He pointed out that the market should not underestimate the Web3 white paper released by China. As rumors of China's unblocking of Bitcoin spread, several Chinese state-owned enterprise executives stated that they will continue to oppose the existence of Bitcoin.
Siu said that China released a Web3 white paper in May, basically stating that Web3 is the future of the internet. The executive stressed that it should not be underestimated that this news came just days after Hong Kong officially announced plans to allow retail cryptocurrency investments. He said: "Although China's Web3 white paper does not mention cryptocurrency, it is still important for China to have a budget to advance Web3."
He claimed that news about the development of cryptocurrency in Hong Kong was everywhere in China, including notices on CCTV. “So basically, every Chinese person in China saw this,” Siu went on to add.
"It's interesting because it's not just about what's happening in Hong Kong. It's really a message from on high, you could say. Hong Kong doesn't do anything without China's approval."
Siu also argued in his keynote that Web3 is a powerful tool that can “drive new technological paradigms” away from U.S. tech dominance.
He specifically mentioned the potentially harmful security risks posed by countries’ reliance on tech giants like Google, Apple, and Facebook, noting: “That’s actually another big agenda item, which is why Japan, South Korea, China, all these places are pushing Web3 so hard because they see it as an opportunity to move away from technology that is essentially dominated by the United States.”
“Competing with U.S. dominance is particularly important for countries like China that are focused on de-dollarization, which is another reason to promote Web3 in these places. Less reliance on the U.S. dollar. Of course, as we know, the U.S. dollar is the world’s global currency,” Siu noted.
The People's Bank of China officially announced in September 2021 that it would once again ban almost all cryptocurrency activities. However, it is worth noting that despite the ban, China remains one of the world's largest cryptocurrency mining centers.
With news of Hong Kong’s aggressive move toward crypto-friendly regulations, many crypto observers have expressed hope that China may lift its years-long ban on cryptocurrencies.
However, several state-related executives, including Zhou Chenggang, CEO of CPIC Investment Management, recently reiterated that China still is and will continue to be against cryptocurrencies in the near future.
It is worth noting that another reason why China insists on banning Bitcoin is that as the RMB continues to depreciate, domestic capital in China has begun to flow into cryptocurrencies. China recently cracked two crypto cases involving more than 50,000 people. China arrested 21 people in the USDT money laundering case it cracked, and the State Administration of Foreign Exchange also fined 10 companies at the end of June to help maintain order in the foreign exchange market.